CML news & views

Today, we publish our lists of the largest mortgage lenders in 2011. The data show that, although lending remains heavily concentrated in the hands of the six largest lenders (an overall pattern that has been reinforced by the credit crunch), the next tier of medium-sized lenders increased their market share last year.

The six largest lenders advanced mortgages worth £113.8 billion in 2011, compared to £110.8 billion in the preceding year. However, despite increasing their amount of lending in absolute terms, their share of the total advanced showed a modest decline in 2011 (from 81.9% in 2010 to 80.7% last year).

Table One: Largest mortgage lenders by gross lending

Source:  Thedata Ltd     
Notes:
1. Most figures are shown on a calendar year basis.  Where we are not able to obtain calendar year figures we have used published results for the organisation's financial year which ended in the same year.      
2. All figures relate to calendar year except: Clydesdale Bank & Paragon  Sep 11   
3. Where possible, gross lending figures are shown net of portfolios purchased.     
4. Figures are rounded to the nearest £100 million and ranked on the same basis.     
5. Wherever possible, figures are shown on a financial services group basis.     
Figures for previous years have been adjusted to account for any mergers and acquisitions occurring in the latest year.     
6. Figures for lenders outside CML membership are taken from published accounts, and may not be on a basis that is fully comparable with those from CML members.
7. The table is truncated at the point below which, due to significant clustering, rankings are not robust or meaningful.  In 2011 over 20 lenders not shown in this table had gross lending of £100 million or £200 million on a rounded basis.     

The data show an expansion of lending activity by those lenders in the tier just below the largest six firms. The next five largest lenders on the list saw their market share increase from 9.9% in 2010 to 13.2% last year. In absolute terms, the amount they advanced increased to £18.7 billion from £13.3 billion in the preceding year.

The figures also show a pattern of increased market share in 2011 for larger mutual lenders. The Nationwide, Yorkshire, Coventry, Skipton and Leeds building societies all increased their market, as, among the banks, did HSBC, Barclays and some of the medium sized firms (Northern Rock and Clydesdale). Among this group, ING Direct has been, by some distance, the fastest-growing lender in relative terms over the last two years. Now ranked the 10th largest lender, ING Direct advanced mortgages worth £3 billion last year, compared with £1.1 billion in 2010 and £0.1 billion in 2009.

As in previous years, the lending totals in our tables are rounded to the nearest £100 million. Below the largest 20 lenders, this rounding effect produces a significant clustering of firms, with nominal lending totals of either £0.2 billion or £0.1 billion (this year’s list would have contained more than 20 lenders with these rounded totals). Last year’s list of the largest 30 lenders was beset by similar problems so, instead of producing another table with the bottom tier dominated by a large number of lenders reporting rounded lending totals that are neither particularly robust nor meaningful, we have decided to limit this year’s list to the 20 largest lenders. 

Table Two: Largest mortgage lenders by balances outstanding

Source:  Thedata Ltd     
Notes:
1. Most figures are shown on a calendar year basis.  Where we are not able to obtain calendar year figures we have used published results for the organisation's financial year which ended in the same year.      
2. All figures relate to calendar year except:     
Clydesdale Bank & Paragon  Sep 11   
3. Where possible, gross lending figures are shown net of portfolios purchased.     
4. Figures are rounded to the nearest £100 million and ranked on the same basis.     
5. Wherever possible, figures are shown on a financial services group basis.     
Figures for previous years have been adjusted to account for any mergers and acquisitions occurring in the latest year.     
6. Figures for 1st charge lenders outside CML membership are taken from published accounts where available, and may not be on a basis that is fully comparable with those from CML members.     

Looking at the data on balances outstanding (Table Two), there is much less movement, as we would expect. The size of the outstanding mortgage books of the six largest lenders was virtually unchanged in 2011, at £899.2 billion (£899.3 billion in 2010). In percentage terms, the largest six accounted for 72.2% of balances outstanding in 2011, compared with 72.6% in the previous year.

Below the top six, the next five largest lenders had balances outstanding of £148.5 billion in 2011 (11.9% of the industry’s total). This was somewhat lower than in the preceding year, when the same group of lenders had balances outstanding of £157.1 billion (12.7% of the industry’s total).